Press Conference on EU-Australia Free Trade Agreement

Welcome Cecilia, it’s so great to have you here this morning, the Trade Commissioner of the European Union, together with Australia’s Trade Minister Steven Ciobo. This is a great day. Cecilia is here to announce the commencement of the negotiations for an Australia - European Union Free Trade Agreement.

We know that trade means jobs. Free trade and open markets means more jobs for Australians and for Europeans. More opportunities, more investment.

There’s $165 billion of European investment in Australia and over $100 billion of Australian investment in Europe. There’s $100 billion worth of two-way trade. It’s a market of over 500 million people with a GDP of over $17 trillion. It’s a huge opportunity. There is the opportunity to do so much more and create so many more jobs.

Now, my Government is committed to free trade. We are not ever going to give up on the opportunities to create more markets, more opportunities for Australians to invest, to export, to trade because we know that means jobs. That’s why we kept going with the Trans-Pacific Partnership after the US under President Trump, pulled out, when many people - including Bill Shorten - said it was dead. He actually said I was “deluded” to continue with the free trade negotiation. Can you imagine that? Such pessimism.

Anyway we had none of that, we kept going with it and we now have the Trans-Pacific Partnership signed. Steven went to South America and signed it up in Chile in March. So we now have the TPP-11.

This can be another great free trade agreement.

So Cecilia, it’s great that you’re here. Welcome, we look forward to hearing from you about the great opportunities and the big horizons for Australia-European trade.

CECILIA MALMSTRöM, EUROPEAN UNION TRADE COMMISSIONER:

Thank you very much to the Prime Minister. It’s a real honour to be here with you and with Steven of course, to launch formally these trade negotiations between Australia and the European Union.

As we have seen with Australia participating in the Eurovision contest, our cultural ties are very deep. Of course we also share so much history, so much values and our commitment to free trade and to multilateral rules.

We have already a strong trade relationship stretching back hundreds of years. The EU is Australia’s second-biggest trading partner already today. We share similar views on how we think world trade should work. We defend open trade, rule-based and fair and this is what we’re going to cement in our great trade agreement.

So it’s a happy day today. I’m really happy to be here to formally launch the negotiations of a deal that can offer possibilities to our citizens, to consumers and to our companies, of course creating big economic opportunities but also bringing our people and our continents closer together.

We have concluded - as you have – also an ambitious trade agenda. Canada, Japan, Singapore, Mexico and we’re looking forward to adding Australia to that circle of like-minded trade partners. It is a challenging time so it’s really good to see that Australia shares our commitment to positive trade agenda and to the idea that good trade agreements are a win-win agreement.

This will offer economic benefits. Our trading goods have gone up steadily, recently reaching €48 billion last year. This can of course be boosted even further with a trade agreement, making it possible to create new jobs. We focus specifically on the small and medium-sized companies, offering them possibilities and of course widening the choices for our consumers.

We have made an impact assessment that shows that trading goods between Australia and the EU, if we have this ambitious agreement in place, could increase with 37 per cent.

We have of course seen your ambitious trade agenda, the Trans Pacific agreement and others, so of course, our businesses are eager to have the same access to your market, to have a level playing field important for our exports, military equipment, machinery, chemicals, processed food and services. For you, I know that having access to 500 million people or consumers, is offering major opportunities for businesses.

We will, as I said, focus on the small companies, facilitating the procedures, cutting red tape, increasing knowledge of how the process works and cutting the cost of exporting.

Economic interests aside this is also important because trade agreements are also linking people together. It’s sending a strong signal today that we are like-minded partners. We are coming together. We are ready to define common values when it comes to workers' rights, environmental protection and consumers’ rights. We launch these negotiations, our teams will meet in two weeks in Brussels to start the technical work already. There will be a few difficulties, but I'm confident that we can overcome it and I look very much forward to a strong future relationship and I'm extremely happy to be here today.

Thank you very much, Prime Minister.

THE HON STEVEN CIOBO, MINISTER FOR TRADE:

Well thank you Prime Minister, thank you, Cecilia. Well, today, we have formally commenced negotiations on a free trade agreement between Australia and the EU. The EU is our second largest market, a market of nearly $23 trillion Australian. It’s a market with whom Australia can do so much more. Building on the strength of not only our people-to-people links in many respects, this rich vein of heritage, of European descent in Australia. But also making sure we look to the future. Europe, like, Australia is a highly mature, highly developed economy. I know they’re genuinely so excited about the opportunity to be able grow trade and investment ties with the European Union. Is there a division?

PRIME MINISTER:

Yep, division. We will return, we’ll be back. We’d better go.

[Interruption for a parliamentary vote]

PRIME MINISTER:

Right, where were we?

MINISTER FOR TRADE:

Thanks PM. As I was saying, this is part of the Turnbull Government’s ambitious free trade agenda, the most ambitious in Australia’s history. The European Union is a critical market for Australia, our second largest trading partner worth roughly $23 trillion Australia. 500 million consumers. This is an opportunity for us to go about changing the parameters of our engagement with the European Union in a way that we haven’t had that opportunity for decades.

So there is a high level of appetite for this. Australian businesses very much look forward to not only competing with European businesses, but recognising there are terrific synergies there, including of course the tremendous work as a Government that you've led, Prime Minister, in terms of our defence contracts with DCNS as well as Rheinmetall, where we see very close collaboration between Australian businesses and European businesses.

On the services side, tremendous potential there as well. We have particularly strong interests in relation to financial services and educational services to name but two. Of course we are aspirational about increased agricultural access for Australian products. Whilst also recognising that we are not a major commodity producer in the same way that some other, for example Latin American countries are, we focus more on the premium side of Australian agricultural products. On investment, we have very strong investment ties between the European Union and Australia. So, on all of these fronts, I am confident that because of the good work that we’ve been able to do together, we will achieve a tremendous win-win outcome. This is going to be a trade deal that will drive economic growth, drive jobs and be good for Europeans and Australians.

PRIME MINISTER:

Well said. Now, some questions, can we start on trade first?

JOURNALIST:

Yep, in the lead up to these negotiations beginning, there have been protests, if you like, from countries like Italy, about the use of brand names, geographic brand names like Parmesan and so forth. Are you confident those things will be sorted out in the nature of this agreement, that Australian agriculture will get better and fairer access to the European market?

EU TRADE COMMISSIONER:

Well, obviously agriculture and what we call geographical indications are very important to us. I think this is probably the chapter that would be the most difficult one. But we are well prepared. We know the different interests. We will start early discussing all this and I'm sure we'll find a good outcome on this.

Obviously negotiations haven't started yet, so I don't want to predict that. But as I said, we're very well prepared. We've done a lot of work on the scoping exercise, so we know the different interests and the difficulties. We'll find a way.

JOURNALIST:

Are you confident this deal will actually get ratified no matter what’s negotiated, when you've seen the Italian government in the last couple of days, raise concerns about the Canadian free trade agreement?

EU TRADE COMMISSIONER:

Well before we get anything ratified, we need to get the deal done. Of course, it needs to be a good deal. That needs to be ratified in your Parliament here and in our Parliament. There is very strong support for this agreement. We'll make the best effort to present an agreement that can be ratified in the different countries.

We've seen some of the the statements made by the Italian government on the Canadian agreement. The agreement has been in force since September, it’s a good agreement. The Italian export to Canada has increased by eight per cent. They have many of their geographical indications protected in that agreement.

JOURNALIST:

Commissioner you speak about it being a difficult global circumstance in terms of trade. We’ve seen sort of tit-for-tat trade war with the EU and the United States recently. You talk about sort of philosophical opportunities to send a message to the rest of the world. What kind of a message do you want to send to the rest of the world, if you are able to agree on this free trade agreement?

EU TRADE COMMISSIONER:

I don’t think it’s philosophical, it’s a very hands on statement that we’re sending. The European Union and Australia have always been defenders of the international system, multilateral trade, the global rules, the predictability that has served us well. It’s not perfect, but it has served us well. I think together with other allies we're ready to stand up, to reform, to develop and strengthen the system. Also, sending the signal that trade is a good thing. It is a mutual beneficial agreement if you do it well.

So, I think it sends a very strong political signal that we're launching these negotiations today.

JOURNALIST:

Trade Commissioner, is there anything that you can say, substantially that you can say, on the issue of agricultural protection? In the long history of trade relationships between Australia and the EU, agricultural protection has almost always been at the heart of the differences between the two countries. So you say you've scoped out the differences. What specifically, if anything, can you suggest to us that the EU is prepared to offer in this negotiation that will be different to what's occurred previously?

EU TRADE COMMISSIONER:

I'm certainly not going to make the offers now, before even the negotiations have started. But I think certainly, for Australia - let me speak for the European Union - we have gone through a very ambitious reform agenda on what we call the Common Agricultural Policy, opening up for more competition, reforming internally. So, lots of changes have been done. We are aware of the interests that Australia has. We also have interests. I'm sure we will find a way. But I'm not in a position today to say exactly where we will end on this.

JOURNALIST:

Minister, your predecessor Andrew Robb drew a line in the sand on biologic medicines, data exclusivity. He said: “five years and no more”. He stood up to the Americans and he won. The EU has 10 years data exclusivity, what will your approach be? Will you, similarly, hold the line?

MINISTER FOR TRADE:

On data protection for biologics? Absolutely. On the Australian Government's position on biologics, let me make two comments. Ordinarily I would not want to go into positions that we'll take into negotiations because I don't think that serves anyone's purpose. But I'm also realistic to know if I even leave the door slightly ajar, you'll race off Peter and others and write articles about us surrendering our Medicare system. So, let me be very clear; our position is as it always has been.

JOURNALIST:

And similarly, can I ask you, what is the EU position on data protection for biologic medicines?

EU TRADE COMMISSIONER:

Well you clearly heard the message from the Minister. We'll take that with us into the negotiations.

JOURNALIST:

Will you hold out for 10 years?

EU TRADE COMMISSIONER:

Let's see how those negotiations go.

JOURNALIST:

On the news between China and the US last week over trade, could I get a comment Trade Minister Steven, you've said this will mean a choke on global growth. Is it possible to get a bit of an idea of exactly what the impact will be on Australia from these tit for tat tariffs? Whether it could mean higher prices or that sort of thing in the long run?

Secondly, could I ask about the auto tariffs that Trump is pursuing. Would this mean, are you going to lobby the Trump Administration against these auto tariffs which could affect car part manufacturers?

MINISTER FOR TRADE:

So to go to the two parts of your question, dealing with the first. In terms of the impact of this, we know there is a positive, very significant benefit that flows to the Australian economy from liberalised trade investment. We've seen that time and time again.

Indeed, it’s at the core of why the Turnbull Government is so focused on having the most ambitious trade agenda in Australia’s history. Indeed, it lay at the core of why we had the TPP-11, why we’ve done deals with China, Japan, Singapore, Peru as well as negotiations that we currently have underway. So we know that to be the case and the proof of the pudding is in the tasting, as they say. In that respect we've seen really strong growth. In fact, a full one third of Australia's GDP growth has been driven by export growth over the past several years. So that is in response to the first part.

Your second element of your question in relation to auto tariffs is that all that's proposed at this stage that the United States has indicated, is that they will undertake a Section 232 investigation into automobiles. So I think it's critical that we're quite particular on this. There aren't tariffs that have been put forward. The President, through Secretary Ross, has announced that there'll be a further Department of Commerce investigation into Section 232 in relation to automobiles. We have to allow time for that to happen and we’ll deal with the circumstances as they present themselves.

JOURNALIST:

Minister, you say you’re looking to the future. Why hasn’t your Government been able to further free trade agreements with Indonesia and India?

MINISTER FOR TRADE:

I indicated in my press conference address last week or the week before that we can see the finish line. So your assertion that we haven’t furthered that is incorrect. Actually we’re making tremendous progress. It certainly isn't done yet, but we can certainly see the finish line in terms of Indonesia. Bear in mind Indonesia's history with respect to trade agreements. Achieving a comprehensive, high-quality trade agreement with Australia will be a tremendous step forward for Indonesia. It is an absolute credit to the Indonesian Government and to their negotiators that we have been able to engage so comprehensively and constructively together. It really speaks to the high levels of goodwill and ambition on both the Australian side and the Indonesian side.

With respect to India, that, in large part, has been driven by domestic Indian politics. There was of course a change of Minister that we had in the middle of last year. But Minister Prabhu and I engage regularly now. He wanted some time to get his feet under the desk, so to speak. But we spoke at WTO meetings I think the week before last. We met in January and we’ve had conversations. Of course, most importantly, we have the forthcoming Joint Ministerial Commission which will take place here in Australia on June 25th. So, we're making progress, actually.

JOURNALIST:

The UK Government has expressed an interest in signing a deal, a free trade deal with Australia, post-Brexit. Do you see this deal as potentially being a blueprint for a future deal with the UK?

MINISTER FOR TRADE:

Look, every trade deal has similar themes and every trade deal has differences. We of course have a working group in the UK. I was pleased that we were able to be, if not the first, one of the first countries with the UK to have established a working group.

Everyone knows the UK has ambitions once they formally exit the EU to have free trade agreements in place. Certainly my aspiration is to have as comprehensive and high quality a deal as we can. There'll be elements in common and elements that are different.

JOURNALIST:

Which will be achieved first, the UK or the EU?

MINISTER FOR TRADE:

I’m not going to play a guessing game as to which will occur first. This is obviously much more advanced and mature. We’re commencing negotiations and this is the formal launch of the commencement of negotiations.

We won't commence negotiations with the UK until such time as they formally leave the EU.

JOURNALIST:

It’s more complex too.

MINISTER FOR TRADE:

That's a separate issue.

JOURNALIST:

Trade Commissioner, this agreement won't have ISDS - investor-state-dispute-settlement provisions - because your negotiating, your fast-track authority doesn't allow that. We agreed to them as part of the TPP and TPP-11. Why do you think they're not needed?

EU TRADE COMMISSIONER:

Well, we have very few of our member states have bilateral investment treaties with Australia. I think there's only five of them. There was an agreement that at this stage this was not really needed. We have reformed our way of looking at ISDS, because we think they are part of the parcel. We have a new investment court system and we're also working towards an international system of investment court. But I think at this stage, we agree that it was not necessary. Should that change we of course will speak with our Australian friends. But at this stage, it was not considered necessary.

JOURNALIST:

Might Australia, might this agreement make use of that investor court that you’re setting up?

EU TRADE COMMISSIONER:

I'm sorry?

JOURNALIST:

Might this agreement make use of that EU investor court?

EU TRADE COMMISSIONER:

No, because we're not negotiating investor protection, in the agreement so there would be no use for that.

JOURNALIST:

Prime Minister, the negotiations come amid a developing trade war between the US and China. You've obviously spoken about how the EU bloc deals with a push-back of rising protectionism. Can you elaborate a little bit on that?

PRIME MINISTER:

We are committed to free trade and open markets. We practice what we preach. We are commencing negotiations for a free trade agreement here with the EU when many people, including Mr Shorten, said the Trans-Pacific Partnership was dead. We persevered with it and we got it concluded.

We are committed to free trade. We have achieved, since the Coalition was elected - initially under Tony's leadership of course - free trade agreements with China, South Korea and Japan, new enhanced access in Singapore, a free trade agreement with Peru, the TPP-11. You've heard about the progress on the Indonesian negotiations.

Look, negotiating free-trade agreements is hard work, as the lady and the gentleman beside me understand better than most. You know, sometimes progress is very, very slow. Sometimes it's faster. But what you need to have is persistence.

You need to be committed to Australian jobs.

I will never give up on Australian jobs.

That's why we will do everything we can to open every door that we can to Australian exporters, whether it is in goods or services, we believe in it. It creates jobs. As Steven has described, we know that. Cecilia and the EU know that.

So what we have to do is work through the differences and as I said, sometimes the progress will be slow. Sometimes it will be swift. But the important thing is, never to give up on Australian jobs.

That's what Bill Shorten did when he told me I should abandon the TPP.

I stuck with it. I kept my commitment to protecting Australian jobs. That's why we got that agreement done.

JOURNALIST:

Prime Minister, can I take you to another topic?

PRIME MINISTER:

Okay well perhaps you and you and then we'll go onto other topics, yes.

JOURNALIST:

So we understand the benefit for Australians and you're trying to protect Australian jobs, but what is the benefit for Europeans and for European citizens?

PRIME MINISTER:

Well, perhaps the Trade Commissioner can answer that but plainly, it's a win-win. That's been the experience of all of these free trade agreements.

EU TRADE COMMISSIONER:

Well, we see new possibilities to eliminate obstacles and tariffs and get access to the Australian market on goods, services, also public procurement which is important for us. So we see possibilities, especially for our small and medium sized companies here.

As I said, it’s also a way to connect people and to enhance the possibilities of cooperating in a lot of other fields. We also have the partnership agreement between the EU and Australia which opens up for cooperation in a variety of fields. So I think we should look at these as both as elements in enhancing cooperation. Obviously we wouldn't engage in this if we didn't see economic possibilities.

JOURNALIST:

How big a setback to international trade liberalisation is the protectionism in the United States at the moment?

EU TRADE COMMISSIONER:

I think both the IMF and the World Bank and the OECD have come up with reports saying that what is happening now is potentially very dangerous to global growth and to the global economy. It is preoccupying, so that's why those of us who believe in open trade and rule-based trade need to stick together.

JOURNALIST:

Is there still momentum for trade liberalisation around the globe, do you think?

EU TRADE COMMISSIONER:

There is a lot. As the Prime Minister said, you have been engaging in a lot of trade agreements. So are we, there are several, we have been in many trade negotiations right now. I see the rest of the world is actually speaking up and saying: “yes, we need good trade agreements”.

JOURNALIST:

Commissioner, the agreement with Singapore took quite long and now we have a bit of leaner agreement with Australia and New Zealand you talk about. So is that the blueprint for the EU for other Asian countries?

EU TRADE COMMISSIONER:

All trade agreements are specific. The trade agreement with Singapore is done, I hope it can be signed very soon by our member states. Looking very much forward to that. I don't want to predict today exactly how long this will take. We are engaging immensely and our team is meeting already in two weeks. So this is a good agreement that I think we will get through with Australia. But every country is different.

PRIME MINISTER:

Very good. Now?

JOURNALIST:

Just a question quickly for the Commissioner, is it also a reply from the EU towards the recent move on TPP? Is it like, sort of a strategy behind that? Or is it a timely schedule?

MALMSTROM:

Well, we welcome very much the TPP-11. I want to salute the Australian Government for their efforts that they did with the other partners to get TPP done. Because it's good for the world if there are global rules and as many countries as possible are engaged in that.

We have been talking about our trade agreements since long, so it's not a response to it. But of course it means that our European businesses are even more eager to also be having the possibilities to act in this region right now. But we welcome very much the TPP and I think it will be good for world trade.

PRIME MINISTER:

Good, thank you. Thank you so much.

JOURNALIST:

Prime Minister, can I ask you that other question?

PRIME MINISTER:

Yes, thank you. Yes, the other question.

JOURNALIST:

On the issue of paywalls and the World Cup, the majority of the game has been put behind a paywall. Yet Optus's system has fallen over again and viewers, fans, are outraged at not being able to watch the games, because the majority aren't available to them.

Does the Government see a problem with putting major sporting events behind paywalls? Perhaps is there an apology or recourse to think about things differently in the future?

PRIME MINISTER:

Well look I have a call in to Allen Lew at Optus, I hope to speak to him later on today to seek his assurances that the failure in the streaming service has been rectified.

JOURNALIST:

Prime Minister just with the income tax debate about to hit the Senate, is the Government serious about this being an “all or nothing” proposition?

PRIME MINISTER:

It is, it is a comprehensive tax reform.

JOURNALIST:

But, you will actually prevent tax cuts for…

PRIME MINISTER:

It is a comprehensive reform and it provides the largest, most progressive reform of personal income tax in a generation. It's one package, it is one reform and we're urging the Senate to support it in its entirety.

JOURNALIST:

And if it doesn't?

PRIME MINISTER:

Look, it’s one package and the Senate is presented there as one comprehensive reform, that's it.

JOURNALIST:

Prime Minister, the point of Katherine's question Prime Minister is that the Treasurer has said that the Government “wouldn’t blink”, so that means it is all or nothing.

PRIME MINISTER:

That's exactly right, he's quite right.

JOURNALIST:

So what does that mean, Prime Minister, in practice?

PRIME MINISTER:

It means it's one comprehensive reform, to be voted on as a whole.

JOURNALIST:

PM, is it your understanding if it hasn't gone through by the end of this fortnight, the tax cuts can be applied if the ATO was of the view some months down months the road, that the Senate has changed its mind?

PRIME MINISTER:

I suggest you direct that question to the Treasurer. But our goal is to have it passed in the next, in these two sitting weeks, so that the reform can become available and the tax, you know the changes which will see people, over 10 million people on low and middle incomes getting a tax refund in respect of next financial year. We'll see that being able to be made available.

JOURNALIST:

What do you say to Pauline Hanson who seems to be the holdout on income tax cuts amongst the crossbench?

PRIME MINISTER:

We'll be engaging, as we always do with the cross-bench, respectfully and as persuasively as we can, not through the medium of a press conference.

Hang on, perhaps we'll go back to Katherine and then to you.

JOURNALIST:

Is the Government prepared to offer Pauline Hanson or other wavering cross-benchers any particular concessions in order, in exchange for - ?

PRIME MINISTER:

I refer to my earlier answer. Thank you.

JOURNALIST:

Labor and the Government agree there needs to be tougher penalties on exporters who break the rules and abuse sheep at sea. During the last sitting week the reforms were pulled, are you going to put it through during this sitting fortnight before you go to the dangerous Middle Eastern summer period?

PRIME MINISTER:

What we're calling on is for Labor to stop playing games with this legislation, support it in the form it's presented. Don't seek to amend it, which of course is what they're seeking to do. We want to get it passed and surely the Labor Party will recognise the calls - both whether it's from the Farmers’ Federation or from the RSPCA - to support the passage of the bill.

There are very good amendments. I think the Minister, David Littleproud, has handled it very well based on the best veterinary advice and the bill should be passed in its current form, without this political, tactical exercise of seeking to amend it.

JOURNALIST:

PM, what do you say to members of your party who would like to privatise the ABC?

PRIME MINISTER:

The ABC will always be in public hands. It will never be sold. That is my commitment. It is a public broadcaster. It always has been and it always will be.

JOURNALIST:

Prime Minister last week you and the Foreign Minister expressed concerns about the US stopping military exercises with South Korea and said perhaps that the US had handed over too much in those negotiations and called for further clarity from the US. Has the Government received further clarity from the US since those comments last week?

PRIME MINISTER:

We're in constant discussion with the US on all of these matters. But on security matters like that, again, I keep my counsel and discussions with our ally at a private level, at a confidential level. We're in constant engagement with them.

I have to say that I think President Trump is to be commended, he has given this engagement with North Korea and the comprehensive denuclearisation - complete, verifiable, irreversible denuclearisation of the Korean Peninsula - a red hot go.

I know it came as somewhat of a shock to many people, seeing him and Kim Jong-un together in Singapore. But he's really giving it a red hot go. He's to be commended for that.

But of course the hard work now lies ahead. So it's an exercise in diplomacy and negotiation. We work very closely with the US and our other partners in the region, but as you can imagine, once again, I prefer to make those communications privately rather than through the medium of a press conference.

Just one more and then I must go.

JOURNALIST:

You’re speaking tomorrow at the China Business Networking event. Are you going to be seeking to use that to strike a conciliatory tone towards China?

PRIME MINISTER:

We have a very good, very constructive relationship with China. It is built on so many levels. We often talk about the size of the trading relationship, but it's also family. I mean, there are 1.2 million Australians of Chinese heritage, two of whom are Lucy and my grandchildren.

So this is a very important relationship, but it's also important that - as in any relationship, whether it's between nations or between individuals or businesses - it's important that people are able to frankly discuss differences and deal with them constructively and honestly. That is exactly what we are doing.

JOURNALIST:

Can I ask you, is there room –

PRIME MINISTER:

With a burgundy jacket like that, you deserve the last question. Would that be a geographic, that would be a geographic description!

[Laughter]

JOURNALIST:

Is there room for Clive Palmer back in politics, considering what happened in Queensland Nickel? Are you surprised by the move of Brian Burston, joining his Party to be his flag-bearer in the Senate?

PRIME MINISTER:

I’ve made a practice of not commenting on changes of affiliation on the crossbench in the Senate. We seek to persuade all members of the crossbench to support our legislation, regardless of which party they're affiliated to, whether it's a long affiliation, or a recent one.

As far as Mr Palmer is concerned, I guess all I can say is we have seen that film before.